The automotive market in China shows signs of breaking into two main camps, one favoring domestic control and the other focused on global rationalization, according to research presented by CSM Worldwide today in Tokyo, Japan. The divided approach could result in the Chinese auto industry becoming fragmented and beset with inefficient processes and structures.
According to CSM, domestically controlled, inwardly focused OEMs such as Geely, Chery and Yuejin will concentrate on low-technology offerings in the B, C and commercial truck segments. Sales will primarily come from within China, with exports concentrated on places in the developing world with less stringent emissions regulations and lower price thresholds. Tier I and II suppliers tend to shy away from working with these OEMs since it is difficult to protect technology.
Further CSM research indicates another group of OEMs in China are taking a globally rationalized, technology-centric approach. Companies such as Dongfeng Automotive, First Auto Works (FAW) and SAIC (Shanghai Automotive Industry Corporation) will use global platforms for domestic consumption and export. Their vehicles will compete in all segments, especially those in consumer-focused sectors driven by design, brand image and technology. These platforms will emanate from Western OEMs, and global Tier I and II suppliers are assured safe transfer of their technologies, processes and materials.
In addition to a review and analysis of China's evolving role in the global automotive market, CSM examined the global powertrain market and shifts in OEM procurement strategies and the affect on global suppliers. Highlights included:
CSM Worldwide supports more than 350 automotive suppliers with global market intelligence and forecasting services. With corporate offices in Detroit, CSM Worldwide covers the global automotive environment from London, Brussels, Frankfurt, Budapest, Sao Paulo, Tokyo, Beijing, Shanghai and New Delhi.
